Jan 2012 Oberlin District Fleet Management

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Oberlin FINAL 12-28-11 Page 1

January 2012

Cost Savings inFleet Maintenance

Oberlin, New Russia, andOberlin School District

Lorain County, Ohio

Tegan BeecheyMatthew Flemming

John HoornbeekHeather Sell


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Disclaimer:

This case study describes the Oberlin Fleet Management collaborative project with insights from leaders of this collaborationThe story is told with the help of the researchers at the Center for Public Administration and Public Policy at Kent StateUniversity. We hope that by sharing experiences and lessons learned through this collaboration, we will help others startsuccessful collaborations. Eric Norenberg (City of Oberlin), John Schroth (Oberlin City Schools), and Fred Swanson (NewRussia Township) contributed insights and information that made this case study possible. The case study is written from inthe first person plural (we) tense -- as though the writers were present and involved in the collaboration -- to enhancereadability and ease comprehension for its readers.

Just the Facts:

Historically, our three government organizationsthe City of Oberlin, New Russia Township, and the Oberlin CitySchool District, all in Lorain Countymanaged their own vehicle fleet operations. Our maintenance facilities were located adiverse locations within a few miles of each other, with Oberlin City School Districts buses stored outside in a residentianeighborhood. After the City of Oberlin built a modern vehicle maintenancefacility in 2007, we began to discuss expanding the facility's capabilities toprovide maintenance services for all three entities. As envisioned, our project

would include equipment maintenance for light duty vehicles, heavyequipment, and school buses; joint fueling; and construction of a storagefacility to extend the life of school buses, resulting in potentially significant

savings. We believed that with some additional up-front investment in training,tools and equipment, and an additional mechanic, the City of Oberlins facilitycould provide all of us with more comprehensive service than we couldprovide individually, thus saving money and improving service over the longterm. Our proposed project also included plans to build a storage facility forthe school buses to provide shelter and thus extend the life of the buses formore long-term cost savings.

We projected our costs at roughly $550,000, with the bulk of this money targeted for construction of the bus storagefacility. In early 2009, we applied for a $150,000 EGN grant to help cover the costs, but we did not receive the grant.

Our project wassuspended for some time, due in part to failure to obtain an EGN grant or other external funding. In

the past year, however, we have explored new opportunities. We found that the City of Oberlins fuel tanks for diesel andgasoline were too small to support the township and the school district, and used this information to initiate planning of ajoint fueling facility for the City of Oberlin, Oberlin Schools, and New Russia Township. Unlike the original proposal, thisproject would not be driven from the top down by City and School District leaders, but would instead stem from the ideas oemployees within each of partner organization. While this project may not be a directoutgrowth of the EGN proposal, EricNorenberg, City Manager for the City of Oberlin, observes: There is a high probability that the discussion during the EGNprocess has led our staff to look at local issues and evaluate the needs of the city and surrounding communities withcollaboration in mind.

Through our discussions, we have learned, above all, that it is important notto rush the collaborative process. We also learned that the original projec

was probably too ambitious given our limited history of working together

and that we probably should have started with a smaller maintenance projectleaving the bus storage facility for a later date. As Oberlin City SchoolsSuperintendent John Schroth notes, We all can see the areas where we haveduplication and where we could do better, but working through personnelissues is the most difficult part, and requires trust. As we move forward withsmaller initiatives,we hope peoples mindsets will change, and that it will beeasier to expand to new areas. For us, the idea of developing shared vehiclemaintenance and fueling services appears to be a viable alternative forcommunities interested in combining services and reducing redundanexpenditures, and we are now involved in discussions about moving forwardto implement this idea.

There is a high probability thatthe discussion during the EGN

process has led our staff to look atlocal issues and evaluate the needs

of the city and surroundingcommunities with collaboration in

mind.

Eric Norenberg, City Manager forthe City of Oberlin

We all can see the areas where wehave duplication and where we

could do better, but working

through personnel issues is the mostdifficult part, and requires trust. As

we move forward with smallerinitiatives, we hope peoples

mindsets will change, and that it willbe easier to expand to new areas.

John Schroth, Oberlin City SchoolsSuperintendent

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Oberlin District Fleet ManagementCollaboration Project

The Problem

Our communities -- the City of Oberlin and New Russia Township -- are not too far from Cleveland. The OberlinSchool district is a separate governmental entity that is collocated with the City of Oberlin, and both of these jurisdictions arelargely enveloped by and adjacent to New Russia Township. Historically, the City of Oberlin and Oberlin City School Districcollaborated on a few projects. The School District used the City Council Chambers for School Board meetings, the City

recreation programs used School District facilities for after school and summer programs, and the city and school consideredsharing athletic and recreation facilities.

Collaborations between New Russia Township and the City and the School District had never really happened beforeSome years back, citizens voted to split areas of Russia Township that were within the Citys limits, and when the new territorysplit from the City, the township became New Russia. Since that time, the Township was wary of partnering with the City andthe School District. In spite of these hesitations, our communities serve over 11,000 citizens, and with a population of thissize, we have tight budgets, and must always keep efficiency in mind when developing new programs and services.

In recent years, concerns about collaboration between New Russia andOberlin have eased. As Fred Swanson, Director of Operations for New Russia

Township observes, In Townships, weve done collaboration for years on a

short term needs basis. As far as cities go, however, collaboration is a relativelynew buzzword, and starting the dialogue process was necessary to getting this[fuel sharing] project off the ground.

The Township has elected new Trustees, who appear open tocollaborations with larger surrounding governments. Partially as a result, theCity and the Township have discussed joint planning, land use, and sewagetreatment. In addition, budget challenges associated with falling tax revenueshave created an environment in which collaboration is not only beneficial, butpotentially necessary. It was in this context that a collaborative opportunitymaterialized around fleet maintenance needs of the City, the School District, andthe Township.

Each of our government entities managed fleet operations at several distinct locations within a few miles of eachother. School District buses were parked open to the elements in a residential neighborhood, reducing the functional life-spanof the equipment and negatively affecting the aesthetic appeal of the neighborhood. The School District had no maintenancefacility of its own, and relied instead on a facility 14 miles outside of the City. Many of the service vehicles in the Townshipfleet also required off-site transportation for maintenance. These conditions provided a foundation for our effort tocollaborate with one another on fleet maintenance services.

8,330

2,3571,138

Figure 1: Populations of Partners

City of Oberlin

New RussiaTownship

Oberlin City SchoolDistrict (students)

In Townships, weve donecollaboration for years on a short

term needs basis. As far as citiesgo, however, collaboration is arelatively new buzzword, and

starting the dialogue process wasnecessary to getting this [fuel

sharing]project off the ground.

Fred Swanson,Director of OperationsNew Russia Township

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The Opportunity

The Efficient Gov Now (EGN) program was a grant contest which ran in 2009 (and again in 2010) under thedirection of a Northeast Ohio philanthropic organization, the Fund for Our Economic Future (Fund). Created to encouragelocal government efficiency through collaboration, EGN invited local governments to write and submit proposals for projects

which involve two or more local governments working together to improve or expand government programs and services.

The Fund invited citizens from across Northeast Ohio to vote on their favorite project to select the three winners With our financial challenges in mind and our collaborative efforts already underway, this grant program presented an

excellent opportunity for our fleet maintenance project.

The Plan

This project developed after we found that sharing resources could save money and increase efficiency. In 2007, theCity of Oberlin completed construction of a vehicle maintenance facility that included a state -of-the-art garage and fuelingstation. Designed for future growth, this facility opened up opportunities to collaborate on fleet management services thacould also help meet potential needs for both the Oberlin School District and New Russia Township.

The Citys maintenance facility was built with expansion in mind, but it was not clear that this proposed growthwould include the Township. The plans for the maintenance facility did reserve a portion of the site, adjacent to the fuelingislands, for School District parking and storage. These plans, which were in place long before a collaboration between all three

partners was discussed, offered a pathway to a collaboration between the township, the city, and the school district.

The Proposal

In the Spring of 2009, we came together to apply for an EGN grant. Our proposed collaboration focused onexpanding the mechanical and storage capacities of the City of Oberlin facility, allowing for a broader range of services andtime coverage than any of us could support individually. Ideally, we would share services and reduce costs. The collaboration

was expected to include equipment maintenance for light duty vehicles, heavy equipment and school buses, joint fueling, andconstruction of a storage facility with an eye toward extending the life of school buses in use. Funding from the grant wasslated to cover mechanic training, tool and diagnostic equipment acquisition, an additional mechanic and a portion ofconstruction costs of school bus storage structures at the site. Of the expected $542,000 in total project costs, our EGNproposal requested $150,000 in award funding (see Figure 2 below).

Figure 2: Breakdown of Revenue Sources

While some of the brick-and-mortar resources were available in the form of the Citys new garage facility, weplanned to acquire tools, diagnostic equipment, and human resources, such as mechanics. We believed thatthe School Districstood to gain from use of the building, since they had to send their fleets further than the City for maintenance. And, in spiteof being forced to share resources, the City stood to gain from the expanded facility and the additional personnel who wouldbecome available if the collaboration became operational.

Figure 3 below, shows an estimate of how we planned to use the funds from the EGN grant application. The Cityplanned to provide material support through provision of land, personnel, and software. As is evident from Figure 2 abovethe School District provided the majority of funds through its Permanent Improvement Levy. New Russia Township did nocommit to contributing funds or resources to the project, as a part of the EGN application as they did not have immediatepotential for significant savings through the partnership.

$25,000

$400,000

$150,000

City of Oberlin

Oberlin City Schools

Requested GrantAmount

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It is also worth noting that the requested grant amount was higher than the Fund for Our Economic Future offeredfor other EGN grants, so it was reasonable to expect that revenue amounts might have to be adjusted regardless of whether

we received the grant. We had no other external resources available to us, however, beyond the possibility of the EGN grantOur proposed timeline for the EGN project is presented in Figure 4.

Figure 4: Proposed Project Timeline

Figure 5 presents our anticipated cost savings. Annual savings were estimated to be $108,000, with the SchooDistrict receiving much of the savings. It is important to note that New Russia Township would not realize any immediatesavings through this partnership, though the potential for long-term savings existed.

Figure 5: Projected Annual Cost Savings (Out of $108,000)

$130,000

$9,000 $5,000 $6,000

Figure 3: Amount of Award Funds Used

Bus Storage Facility

Software Licenses

Mechanic Training and

Certification

Tools and Equipment

$60,000

$1,500

$40,000

$1,500$1,000 $4,000

Oberlin City Schools- Bus Maintanence

Oberlin City Schools- Fuel Purchasing

Oberlin City Schools- Extending Life of Buses

City of Oberlin- Fuel Purchases

City of Oberlin- Reduced Overtime

City of Oberlin- Reduced Outsourcing

20102009

Aug 09

Negotiatelease for busstorage facility

Review andapprove busstorage facilitydesign

Sept 09

Negotiateschool districtfleetmaintenanceagreement

Update fleetmanagementsystem

Oct 09

Updatefueling systemfor schooldistrictaccounts

Nov 09

Bus storagefacilityconstruction

Recruiting,selecting,hiring andtraining anadditionalmechanic

Feb 10

Township fleetmaintenancebegins

Fueling begins

June 10

Negotiate township fleetmaintenance agreement

School district fleetmaintenance begins

Negotiateintergovernmentalagreements for fueling

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The City also anticipated receiving some savings in the form of reduced fuel costs, reduced overtime expenses, andreduced outsourcing of services. Notably, there were no savings in funds reported for New Russia Township.

Our EGN proposal also envisioned better use of fleet maintenance personnel. The city had two mechanics on staffoperating on a single shift. By using the Citys facilities equipment and liftsfor a second shift with an additional mechanicprovided by the school district, both Township and School District needs would be met at limited additional incrementalcosts, while City and School District mechanical servicing would be improved.

We also anticipated that the savings accrued could reduce tax burdens for the School District and perhaps for New

Russia Township over the long term. According to the project proposal, Oberlin and New Russia voters could experience adecrease in taxes due to the increased longevity of their bus fleet and improved transportation management software.

In the case of school taxes, the Permanent Improvement levy was up for renewal in 2010, and reduced taxes werepossible if the bus storage facility was built. As Figure 5 indicates, this could potentially save taxpayers a significant amount omoney, with about $40,000 in savings per year in bus replacement, as well as an estimated $60,000 in savings on busmaintenance. Finally, joint use of the City maintenance facility was expected save about $1,000 of overtime for repair andtowing of stranded busses due to an improved preventive maintenance schedule.

Our collaboration could also serve as a model for other governments in the region. In Lorain County alone, there are18 townships, 15 school districts, and a mix of 17 villages and cities. This creates the potential for 50 separate fleet and fuelingoperations. Many of these operations have facilities that are inadequate, or do not fully utilize the potential of existing facilities

This creates the opportunity to collaborate, reducing redundant expenditures while avoiding additional cost.

The Reality and the Progress

While our project received a number of votes from citizens in Lorain County and northeast Ohio, we did not receivean EGN grant. Because we had no other sources of funding available, our project was effectively discontinued in the Fall o2009. We were thus forced to step back and wait on our project because we did not have the funds to support the capitaexpenditures that would be necessary to provide a storage facility for the Oberlin City School District buses.

Over the past year, however, we have been exploring a number of other opportunities.. We found, for instance, thatthe fuel tanks for diesel and gasoline at the City of Oberlin facility were not large enough to support the township and theschool district, and used this information to initiate planning of a joint fueling facility between the City of Oberlin, Oberlin

School District, and New Russia Township, while leaving the bus storage facility issue to be addressed at a later date. We alsorecently started talks with New Russia Township about sharing a joint wash facility.

An adjusted timeline for the project, from issue identification in the 2005-2006 time frame through 2011 is shown inFigure 6.

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Figure 6: Complete Timeline of Joint Maintenance Facility

PHASE 3: A New Discussion

A new conversation develops regarding a scaled

back project, fuel sharing arrangements, and a

joint washing facility.

PHASE 2: Development of Joint Maintenance Facility Proposal

Chose to pitch program for joint maintenance facility to EGN.

Did not win the award.

PHASE 1: Issue Identification

Recognition of potential savings through

joint maintanence

2005-2006

City begandevelopmentof newpublic worksgarage, and

decided tokeep spaceopen forbuses forfueling,storage, andmaintenanceSelection ofpotentialpartners

2006 2007 2008 2009 2010 2011

Winter 2009

EGN ProgramannouncedDevelopedproposal

Spring 2009

Applied toEGN

July 2009

EGN votingoccurred, didnot receivefunds

Fall 2009

Plans for a jointmaintenancefacility are stalled.

2011

Fueling station planadvancedDiscussion of jointwash facility begins

Fall 2010

Discussion of

joint fuelingstationinitiated.

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The Outcomes

At this point, our collaboration has not achieved any concrete savings or service improvements. Several underlyingconcerns have stalled our progress. The loss of the EGN grant meant that a significant portion of the benefits to the SchooDistrict would not materialize. Resources were in short supply for the School District and as a result, they could not shifdollars from academic programs to a capital expense like a storage garage. At the same time, there remained no demonstratedcapability in the City facility to service School buses and this is unlikely to change without a contract and long termcommitment from the School District to justify the investment in training, tools and equipment to service buses.

The recent developments in fuel sharing are promising, however. While wedo not currently have the capacity to house the school buses, the fueling projectappears to be moving forward, and offers a real potential for cost savings throughjoint purchasing. Additionally, the joint wash station offers another potential meansfor cost savings; currently, we need to travel to reach wash stations large enough toservice large public vehicles. A new wash station could cut down on fuel costs

while also introducing savings through joint purchasing of soaps, and jointpayment for runoff treatment.

None of this progress would have been possible without continuouscommunication among our partners. As Fred Swanson, Director of Operations forNew Russia Township observes, It is important to try to keep the ball rolling on

collaborations. Without steady communication, months will go by and the projectcan be left idle if you do not keep the discussion going.

The Lessons

Several lessons emerge from this case study. The Oberlin City Manager, Eric Norenberg, suggested early on that wecould use maintenance as a starting point for the collaboration instead of trying to accomplish everything at once, and thisadvice proved valuable. By using this step by step approach, we are now creating a stronger justification for the School Boardto follow up on a maintenance arrangement by building a storage garage closer to the city facility.

Additionally, we learned that coordination is critical. As highlighted by JohnSchroth, Superintendent of Oberlin City Schools, When you are dealing witmultiple government agencies, coordination is critical, because spanning differententities and union contracts can be challenging.

We also learned that when approaching projects with large up front capitacosts, we should have been aware of the importance of external support, and pursuedadditional funding beyond EGN. Facilities do not save money initially. Becausefacilities tend to provide long-term cost savings rather than short term ones, ourproject was not likely to succeed in terms of cost savings without external funding.So we should have made a more explicit effort to line up other sources of externafunding to pursue.

Finally, and perhaps most importantly, welearned that it is important to not rush the

collaborative process. As Eric Norenberg observes,Collaboration really needs a high degree of trust andcomfort, and the opportunity for the partners to getto know each other -- and that was one byproduct ofthe first EGN application. We began to build a bondof trust through discussion, and used this bond topursue the fuel sharing project.

Collaboration really needs a high degree of trust and

comfort, and the opportunity for the partners to get toknow each other -- and that was one byproduct of thefirst EGN application. We began to build a bond of

trust through discussion, and used this bond to pursuethe fuel sharing project.

Eric Norenberg, City Manager for the City of Oberlin

When you are dealing withmultiple government

agencies, coordination iscritical, because spanningdifferent entities and union

contracts can bechallenging.

John Schroth,Superintendent of Oberlin

City Schools

It is important to try to keepthe ball rolling on

collaborations. Without steadycommunication, months willgo by and the project can be

left idle if you do not keep thediscussion going.

Fred Swanson,Director of Operations

New Russia Township

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Additional Contacts

PROJECT SPECIFIC CONTACTS

Eric Norenberg - City Manager, OberlinPhone: (440) 775-7206

Web:http://www.cityofoberlin.com/Fred Swanson - Operations Director New Russia TownshipPhone: (440) 775-7782

Web:http://newrussiatownship-oh.gov/cms/

John Schroth - Superintendent Oberlin City SchoolsPhone: (440) 776-4550

Web:http://www.edline.net/pages/Oberlin_City_SD

LOCAL GOVERNMENT COLLABORATION CONTACTS

Center for Public Administration and Public Policy

Phone: 330-672-7148Web:http://www.kent.edu/cpapp/collaboration/index.cfm

The Civic CommonsPhone: 800-530-8507

Web:http://theciviccommons.com/

Fund for Our Economic FuturePhone: 216-456-9800

Web:http://www.futurefundneo.org/

Ohio Auditor of StatePhone: 614-466-4514

Web:http://www.auditor.state.oh.us/

For More Information

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http://www.cityofoberlin.com/http://www.cityofoberlin.com/http://www.cityofoberlin.com/http://newrussiatownship-oh.gov/cms/http://newrussiatownship-oh.gov/cms/http://newrussiatownship-oh.gov/cms/http://www.edline.net/pages/Oberlin_City_SDhttp://www.edline.net/pages/Oberlin_City_SDhttp://www.edline.net/pages/Oberlin_City_SDhttp://www.kent.edu/cpapp/collaboration/index.cfmhttp://www.kent.edu/cpapp/collaboration/index.cfmhttp://www.kent.edu/cpapp/collaboration/index.cfmhttp://theciviccommons.com/http://theciviccommons.com/http://theciviccommons.com/http://www.futurefundneo.org/http://www.futurefundneo.org/http://www.futurefundneo.org/http://www.auditor.state.oh.us/http://www.auditor.state.oh.us/http://www.auditor.state.oh.us/http://www.auditor.state.oh.us/http://www.futurefundneo.org/http://theciviccommons.com/http://www.kent.edu/cpapp/collaboration/index.cfmhttp://www.edline.net/pages/Oberlin_City_SDhttp://newrussiatownship-oh.gov/cms/http://www.cityofoberlin.com/

Jan 2012 Oberlin District Fleet Management

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